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How to Increase Your App’s Recurring Revenue

Use these tools to market effectively and keep your users coming back.

Illustration of people in a revolving door.

For businesses that have mobile apps, recurring revenue is important. Marketers and developers are focusing less on download fees and more on in-app purchases and paid subscriptions, and it’s easy to see why. One-time download fees are helpful, but consistent income is how you stay afloat.

In terms of recurring revenue sources, subscriptions tend to be the strategy of choice for non-gaming apps. In September 2019, 95% of the top 100 apps in this category offered subscriptions. Among all app professionals, 19% report using a subscription model for non-gaming apps.

For game developers, in-app purchases are the top source of recurring revenue. Nearly 80% of games use it as part or all of their monetization strategy. Non-gaming apps are using in-app purchases more and more as well—this strategy now accounts for 50% of all monetization for non-gaming apps.

What’s the right strategy for you? It all depends on how people use your app and what keeps them coming back. Here are some tools that can help.

Revenue tracking

It costs 5 times as much to attract new users than to sell to the ones you already have. Knowing what your existing users are interested in buying can help you create a more valuable offering and increase your recurring revenue.

Tracking marketing performance

With so many different ways to reach out to your users, it’s important to know which channels are performing best and driving revenue. Which emails or social posts are getting people to subscribe or make a purchase in-app? Which audience segments are engaging regularly with your content and where?

Mailchimp makes it easy to track the results of your marketing campaigns and take action on them. All your campaign data and audience information is presented in an easy-to-digest format on your personalized audience dashboard. With just a few clicks, you can find out who’s responding to your marketing and when they’ve subscribed, upgraded, or made a purchase in the app.

Tracking in-app activity

Marketing is one way to generate recurring revenue, but your app as a product can also sell itself. Think about the freemium model, for example. Users download your app for free and enjoy its basic functions without needing to pay anything. You can make extra functionality available for a fee in the form of in-app purchases.

Another way is to build a comprehensive option for your users that they can subscribe to. Access to advanced features and exclusive content are both strategic offerings you could make. To figure out what could drive interest in that, you need to understand who is using your app and track their pathways to purchase inside the app.

Don’t worry—Mailchimp has you covered here too. Our open API and Mobile SDK can send user data from your app to your personalized audience dashboard, where you’ll also find all your marketing campaign data and insights. All you have to do is connect the API or SDK to your app and you’ll see what’s prompting your users to buy or subscribe.

Cohort or segment analysis

Cohort analysis and segment analysis are efficient ways of finding out about your users and what they love about your app. A cohort or segment is any group of users that share a particular set of characteristics. Business analysis professionals usually use “cohort” to mean a group of people who joined your audience around the same time. That’s what you’ll see if you do a cohort analysis on Google Analytics. A segment tends to be a grouping of users who share similar traits or have similar in-app behavior.

With these types of analysis, you can dig deep into how each cohort or segment behaves in your app. Since you’re looking specifically at recurring revenue, you’ll want to focus on metrics like revenue per user, transactions per user, time to purchase, total revenue, and total transactions. Looking at these factors as they apply to different cohorts or segments, you can see things like:

  • Whether people spend less, more, or the same as they gain more experience with your app
  • Which marketing campaigns and product updates engage which segments
  • Which of your cohorts or segments are the most engaged at any given time
  • Which of your cohorts or segments spend the most and on which features or offerings

Mailchimp’s audience dashboard allows you to easily review your audience data by segment to get detailed information on how each is engaging and spending. This information can guide your marketing decisions and help you create more relevant in-app offerings. For example, if you see that users tend to engage most readily with exclusive content, you can focus on building out more of that to encourage subscription purchases.

Planned customer journeys

The more you know about how a person uses your app, the better you can market to them and encourage them to subscribe. That’s where Customer Journeys come in.

People buy subscriptions and make in-app purchases when they feel there’s value in doing so. Customer Journeys help you understand when that value will be most apparent to users, allowing you to offer purchases at just the right time. Your first step is to find out who your users are.

Persona building

This is another technique where Mailchimp’s data analytics comes in handy. On your audience dashboard, you’ll find information about your users—when they joined, what they buy, and so forth. Mailchimp even uses advanced machine learning to predict their ages and genders, letting you create more detailed personas for them. The more you know about your users, the more accurately you can predict what they’ll do with your app and what’s most important to them.

Defining journey stages

A customer journey is essentially a map of how people use your app. Each user’s experience will be different, but there’s usually a common pathway that people follow.

Imagine you have a budgeting app with a freemium model. Your users might start by downloading the app and creating an account. They then start experimenting with basic features like entering expenses and creating a simple budget. Next, they’ll want to set up more accounts, add alerts, or connect multiple users to track family expenses.

Curating the journey

When you understand how people engage with your app, you can identify just the right moment to prompt users with an in-app purchase, new subscription, or package upgrade. To return to the budgeting app described above, you’d look at which features people start using after they’ve taken a while to get comfortable with the free features. Which are the most popular? What pages or features behind a paywall do they try to visit most frequently? Those are moments to engage and offer access to features through a purchase.

Remember to extend your journey beyond the first few days and months of use. How do you want people to engage after they’ve been with you for a year, when their subscriptions are up for renewal? What will they be doing, and how will you remind them that those activities are valuable?

Prompting for payment

Once you’ve curated a journey and know the features that are most appealing to users based on their segment or cohort, you can craft a marketing strategy to engage with them. You want to be able to reach those users in a timely manner with a message that’s relevant to what they’re doing. This is where Mailchimp’s behavioral targeting and behavior-based automations come in handy.

Continuing with the budgeting app example, if you notice that users on your free plan are most likely to upgrade once they’ve used your “share expenses” feature, you can use your API or SDK to track when a user interacts with that feature. The information will populate on that user’s contact profile along with the date and time they engaged with the feature. You can set up a behavior-based automation triggered by that action—it will automatically send an email to that user within a certain amount of time of using that feature to offer them a subscription with expanded features. This way, you don’t have to monitor the activity daily—Mailchimp will do it for you and make it easy to increase revenue from those users.

Product engagement

Above all else, recurring revenue depends on people engaging with your app. If you have a subscription model, you need people to renew their subscriptions. If you offer in-app purchases, you need them coming back so they can make those purchases.

First things first—look at your in-app data and find out where people are engaging the most with your app. This is a great place to segment. Are there particular updates that generate more activity? Are there pages or functions that get the most use? This information will tell you what to promote and when.

For example, maybe you get a lot of traffic on the expense reporting page of your budgeting app. You could create an entire “stay on a budget” integrated marketing campaign focused on that page. Since you’re pointing people to a valuable function, you’re creating the kind of loyalty that will drive recurring revenue later.

You could also highlight engaging aspects of your product in your automated welcome email—and if you don’t have one of those going out yet, it’s time to set it up. Welcome emails have a 50% open rate and get 5 times more clicks than other email campaigns.

Use that email to introduce people to your brand and point them toward highly engaging aspects of your app. Choose functions that they don’t have to pay for right away but that may lead them to purchase once they’ve become loyal users.

Retention marketing

Recurring revenue comes from existing loyal app users, so don’t neglect them in your marketing. Send automated emails out to users when they haven’t logged in for a while. One “we missed you” email can go a long way. Mailchimp’s automated marketing tools make it easy to set these up.

Stay in touch with your active users as well. Let them know if you’re adding a new function, and if it’s paid, consider giving them a discount or early access. Remind them of updates. Offer discounts on in-app purchases. Thank them for continuing to be a loyal user. There’s so much you can do to stay connected.

The takeaway

Generating recurring revenue for your app is about more than just offering subscriptions or in-app purchases. It’s about engaging people with your product, making it something they depend on or love using.

Use audience data to find out who your users are, what interests them the most, when they engage, and when they don’t. Use that information to design marketing campaigns, plan your subscription offers, and create in-app purchase and upgrade opportunities that match how people use the app.

With Mailchimp, it’s never been easier to plan your app marketing strategy and get the kind of recurring revenue you’ve been dreaming about. Get started now—app success is just a few clicks away.

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